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Supreme Court Decision 2011Da31225 Decided May 29, 2014【Injunction against Broadcasting Interference, etc.】

(5/29/2014)

Main Issues and Holdings】

[1] Whether the “freedom to broadcast programming,” giving shape to the freedom of broadcast, encompasses the freedom from any interference in the process of TV program transmission to the public, including any changes to the contents of the aired shows (affirmative)

[2] In a case where “A” corporation, a TV advertisement service provider, recruited members among the subscribers to “B” corporation et al., cable TV broadcasting service providers, and aired caption advertisements by connecting the advertisement distributing systems between television receivers in the members’ possession and the cable TV set-top boxes in B et al.’s possession, the case holding that A’s advertisement infringes on B et al.’s advertisement operating profits, and thus, constitutes a tort under the Civil Act; and that B et al. may claim for injunction against A from committing the act or having any third party commit the act

[3] In an adjudication procedure for establishing an execution title concerning a liability of nonfeasance, the requisite elements for ordering an indirect compulsory performance in anticipation of the obligor’s failure to perform

Summary of Decision】

[1] In view of the legislative intent and contents of Article 1, Article 2 subparags. 1, 15, and 17, and Articles 4(1) and 4(2) of the Broadcasting Act, the freedom of broadcast programming, giving shape to the freedom of broadcast, encompasses not only the broadcaster’s freedom from any interference with the planning, arranging, or producing the broadcast shows, but also its freedom from any interference in the process of broadcast transmission to the general public, including any changes to the contents of the aired shows.

[2] In a case where “A” corporation, a TV advertisement service provider ran its advertisement business by: (a) recruiting as members those business establishments catering to unspecified masses of the public, such as restaurants and bathhouses, which subscribed to the services of “B” corporation et al., cable TV broadcasting service providers; (b) connecting A’s advertisement footage transmitter (CF box) to the TV sets of each of the recruited members and the cable broadcast receiver set-top boxes of B et al.; and thereby (c) effecting an adjustment to the width-length proportion of the screen view of the aired shows transmitted by B et al., so that the shows themselves were displayed on the upper part of TV screen, while the lower part displayed advertisement in caption, which A had commissioned from advertisers it separately recruited and stored in CF box, the court held that while B et al.’s freedom of broadcast programming was not necessarily infringed upon by the CF box installation, A’s advertisement is an act of unfair competition infringing on B et al.’s advertisement operating profits, and thus, constitutes a tort under the Civil Act; and that B et al. may claim for injunction against A from committing the act or having any third party commit the act.

[3] An indirect compulsion is the only way to compel the performance of a liability of nonfeasance, which is a non-substitutable liability. In principle, a provisional order of indirect compulsory performance compels the obligor to make a certain compensation should it default on its obligations, upon the obligee’s separate petition and a necessary examination of the obligor, once the enforcement title is established in the adjudication process. Therefore, in an adjudication process to establish the enforcement title, a provisional order of indirect compulsory performance as a precaution against the obligor’s failure to perform may only be issued where it is probable that the obligor may infringe on the entitlement title ordering the performance of the liability of nonfeasance, notwithstanding the establishment of the enforcement title, at the time of closing argument of the pertinent proceedings, and where an optimal compensation amount can be assessed in the proceedings to be ordered under Article 261 of the Civil Execution Act.

Reference Provisions[1] Article 21(1) of the Constitution of the Republic of Korea; Articles 1, 2 subparags. 1, 15, 17, 4(1), and 4(2) of the Broadcasting Act / [2] Article 21(1) of the Constitution of the Republic of Korea; Articles 1, 2 subparags. 1, 15, 17, 4(1), 4(2), and 9(2) of the Broadcasting Act; Article 750 of the Civil Act; Article 300(2) of the Civil Execution Act / [3] Article 261 of the Civil Execution Act

Article 21 of the Constitution of the Republic of Korea

(1) All citizens shall enjoy freedom of speech and the press, and freedom of assembly and association.

Article 1 of the Broadcasting Act (Purpose)

The purpose of this Act is to promote the protection of the rights and interests of the viewers, the formation of the democratic public opinion and the improvement of national culture, and to contribute to the development of broadcasting and advancement of public welfare, by guaranteeing the freedom and independence of broadcasting and by enhancing public responsibilities of broadcasting.

Article 2 of the Broadcasting Act (Definitions)

The definitions of terms used in this Act shall be as follows: <Amended by Act No. 7213, Mar. 22, 2004; Act No. 8060, Oct. 27, 2006; Act No. 8301, Jan. 26, 2007; Act No. 10856, Jul. 14, 2011>

1. The term “broadcasting” means planning, programming or producing broadcast programs, and transmitting them to the general public (including the recipients under individual contracts; hereinafter referred to as “viewers”) through telecommunication facilities, referring to any of the following items:

(a) Television broadcasting: Broadcasting which transmits broadcast programs comprised of the instant images of stationary or moving objects, and of the voices, sounds, etc. incidental thereto;

(b) Radio broadcasting: Broadcasting which transmits broadcast programs composed of voices, sounds, etc.;

(c) Data broadcasting: Broadcasting (excluding the cases of providing or mediating through communication network, such as the Internet; hereinafter the same shall apply) which transmits broadcast programs composed of, mainly, the data (referring to the letters, numerals, diagrams, graphs, images and other information systems), and of the images, voices, sounds and their combinations incidental thereto using the channels of the broadcasting business operators;

(d) Digital multimedia broadcasting: Broadcasting which transmits television broadcasting, radio broadcasting and data broadcasting in complexity using multi-channels for the main purpose of receiving while moving[.]

15.The term “broadcast programming” means an act of deciding the types, contents, quantity, time, and arrangements of the broadcasted items;

17.The term “broadcast program” means the broadcast contents forming a unit of broadcast programming[.]

Article 4 of the Broadcasting Act (Freedom and Independence of Broadcast Programming)

(1) The freedom and independence of broadcast programming shall be guaranteed.

(2) No one shall regulate or interfere with the broadcast programming unless as prescribed by this Act or other Acts.

Article 9 of the Broadcasting Act (License, Approval, Registration, etc.)

(2) A person who intends to operate CATV broadcasting business or CATV relay broadcasting business shall obtain a license from the Korea Communications Commission after installing facilities and technologies satisfying the standards prescribed by Presidential Decree. <Amended by Act No. 8867, Feb. 29, 2008>

Article 750 of the Civil Act (Definition of Torts)

Any person who causes losses to or inflicts injuries on another person by an unlawful act, intentionally or negligently, shall be bound to make compensation for damages arising therefrom.

Article 261 of the Civil Execution Act (Indirect Compulsory Performance)

(1) In case where the nature of debts enables one to make an indirect compulsory performance, the court of first instance shall, upon request of a creditor, render a ruling on ordering an indirect compulsory performance. Such ruling shall clarify an obligation to perform the debts and an appropriate period for performance, and when the debtor defaults on the performance within such period, the court may order him to make a reimbursement of specific amount in proportion to the defaulted period, or order him to make an immediate compensation for damages.

(2) An immediate appeal may be raised against a judgment on the request under paragraph (1).

Article 300 of the Civil Execution Act (Purpose of Provisional Disposition)

(2) Provisional dispositions may also be effected in order to fix a temporary position against the disputed relation of right. In this case, such provisional dispositions shall be effected specially in case where intending to avoid a significant damage on a continuing relation of right or to prevent an imminent danger, or where there exist other necessary reasons.

Reference Case】[3] Supreme Court Decision 93Da40614, 40621 decided Apr. 12, 1996 (Gong1996Sang, 1486)

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Plaintiff-AppelleeC&M Cable Co., Ltd. et al. (Yoon & Yang LLC, Attorneys Jeon Tae-goo et al., Counsel for plaintiff-appellee)

Defendant-AppellantChang-il Ad Asset Co., Ltd. (Bae, Kim & Lee LLC, Attorneys Cho Won-hee et al., Counsel for defendant-appellant)

Judgment of the court below Seoul High Court Decision 2010Na67991 decided March 18, 2011

DispositionAll appeals are dismissed. The costs of the appeal are assessed against the Defendant.

ReasoningThe grounds of appeal are examined.

1. Regarding grounds of appeal Nos. 1 and 5

(1) The freedom of press, which is guaranteed in accordance with Article 21(1) of the Constitution, also includes the freedom of broadcasting (see, e.g., Supreme Court Decision 2008Du13101, Dec. 23, 2010).

Meanwhile, Article 1 of the Broadcasting Act declares that the Act’s purpose is in guaranteeing the freedom and independence of broadcasting, while Article 2 defines that the term “broadcasting” means planning, programming or producing broadcast programs, and transmitting them to the general public (including the recipients under individual contracts) through telecommunication facilities, that it refers to television broadcasting, radio broadcasting, data broadcasting and digital media broadcasting (Article 2 subparag. 1), that the term “broadcast programming” means an act of deciding the types, contents, quantity, time, and arrangements of the broadcasted items (Article 2 subparag. 15), and that the term “broadcast program” means the broadcast contents forming a unit of broadcast programming (Article 2 subparag. 17). In additional, Article 4 provides that the freedom and independence of broadcast programming is guaranteed (Article 4(1)) and that no one shall regulate or interfere with the broadcast programming unless as prescribed by this Act or other Acts (Article 4(2)), thereby guaranteeing the broadcasting business operators (“broadcaster”)’ freedom of broadcast programming. Considering these legislative purposes and contents of the Broadcasting Act, it is sufficient to view that the freedom of broadcast programming (which is an actualization of the freedom of broadcasting) includes not only the broadcaster’s freedom to be not interfered with when planning, arranging, and producing broadcast programs, but also the right to be not interfered with during the process of transmitting broadcast programs to the general public, such as changes applied to the programs’ contents.

The reasoning of the judgment below reveals the following facts: (a) the Plaintiffs are cable television (“CATV”) broadcasters who are operating CATV in each broadcasting service areas after acquiring permission to operate CATV businesses as prescribed by the Broadcasting Act; (b) the Defendant, a TV advertisement service provider, recruited as members those business establishments catering to unspecified masses of the public, such as restaurants and bathhouses, which subscribed to the services of the Plaintiffs, then connected the Defendant’s advertisement footage transmitter (CF box) to the TV sets of each of the recruited members and the cable broadcast receiver set-top boxes of the Plaintiffs; by so doing, (c) effected an adjustment to the width-length proportion of the screen view of the aired shows transmitted by the Plaintiffs, so that the shows themselves were displayed on the upper part of TV screen, while the lower part displayed advertisement in caption, which the Defendant had commissioned from advertisers it separately recruited and stored in CF box; and (d) by signing branch contracts with third parties, the Defendant had those branch operators sign contracts with restaurants and bathhouses, etc., on advertisement caption services, thereby having those operators with CF boxes installed carry out caption advertisement in the said manner.

Upon examining the above facts in light of the legal principles seen earlier, after transmission, the Plaintiffs’ TV programs were neither modified or changed during the transmission process, and merely the width and height ratio of the screen transmitted by the Plaintiffs were adjusted, while advertisement subtitles were displayed underneath the screen, only on TV screens where the Defendant’s CF box was installed, and did not affect TV screens of other subscribers of the Plaintiffs. Thus, it cannot be perceived that the aforementioned screen modification occurred during the process of the Plaintiffs’ transmission of the programs to the public. Since it is difficult to view that the Defendant’s aforementioned CF box installment interfered with the Plaintiffs’ process of sending broadcasting programs to the public, such as changing the programs’ contents etc., the Plaintiffs’ freedom to arrange programs as cable TV operators where not violated.

Yet, the court below determined that the Plaintiffs’ freedom of broadcast programming was violated because the broadcasting signals transmitted by the Plaintiffs were processed and distorted by the Defendant’s CF boxes, to be aired with altered contents. In so determining, the court below erred by misapprehending the legal principles on the freedom of broadcasting.

(2) However, the act of freeloading on a competitor’s effort and investment and gaining unfair profit and violating the competitor’s interests which deserve legal protection by using a competitor’s product — which was developed with considerable effort and investment — for one’s business without permission and against trade ethics or fair competition order is an act of unfair competition, which constitutes a tort according to the Civil Act. In such cases of continuous unauthorized use, it is difficult to expect effective remedy for the victim from a monetary compensation order. If the victim’s interests protected by the ban on unauthorized use surpass the assailant’s interests upon comparing and considering both interests, a ban or prevention of the act can be claimed (see, e.g., Supreme Court Decision 2008Ma1541, Aug. 25, 2010).

According to the evidence adopted by the court below, the Plaintiffs were cable TV operators who ran advertising businesses by broadcasting commercials along with TV programs. Profits gained from such advertising constitutes profits which deserve legal protection. And according to the facts examined above, the Defendant recruited the Plaintiffs’ subscribers who are business catering to the public (such as restaurants and bathhouses) as members, then operated an advertisement business by connecting the Defendant’s CF boxes between each members’ TV sets and the Plaintiffs’ cable set-top boxes, thus adjusting the width and height ratio of the TV programs transmitted during the Plaintiffs’ broadcasting so that the programs were displayed on the upper part of the TV screen, while the lower part displayed subtitle advertisements. Due to the CF boxes, the advertising subtitles below were visible to the general public watching TV while using the aforementioned members’ businesses, which may have reduced the advertisement effect as it lowers viewer attention to the Plaintiffs’ advertisements.

The Defendant’s aforementioned act of advertising constitutes a tort as prescribed by the Civil Act, since the Defendant made unauthorized use of the broadcasting equipments and programs which the Plaintiffs — who compete with each other in the advertising field — developed through considerable effort and investment for its own business, against business ethics or the fair competition order, and thus acquiring unfair profit by freeloading on the Plaintiffs’ efforts and investments while also violating the Plaintiffs’ advertisement profits, which deserve protection by the law. And upon examining the records of all the Plaintiff allegations up to the closing date of the oral argument, the Plaintiff allegation also includes the purpose in the aforementioned sentence.

Furthermore, according to factual relations examined above, the Defendant’s above advertising was not a one-off act, but repeats continuously whenever the Plaintiffs’ subscribers who installed the Defendant’s CF boxes turned on their televisions and set-top boxes. And considering that the nature of advertising via the Defendant’s CF boxes appears to have made it highly difficult for the Plaintiffs to identify which of their subscribers installed the CF box, the extent of the Defendant’s advertising, and respond accordingly, it is difficult to expect effective remedy from a simple monetary compensation order against the Defendant. Another aspect to consider is the fact that the Plaintiffs’ interests which can be protected by prohibiting the Defendant’s aforementioned advertising is notably greater than the Defendant’s freedom of business. Thus, even if the Defendant’s act of connecting its CF boxes to the Plaintiffs’ set-top boxes to process and alter broadcast signals transmitted by the Plaintiffs did not infringe the freedom to broadcast since it did not occur during the transmission process but occurred after the subscribers received the signals, the Plaintiffs may still claim to prohibit the Defendant and any third party from continuing the aforementioned act, which constitutes a tort.

It is justifiable for the court below to have issued an injunction against the Defendant from the said act on grounds of the circumstances as seen earlier. In so doing, the court below did err by misapprehending the legal principles on infringing on broadcasters’ business profit interests or the on the right to claim for injunction against torts, or by violating the principle of disposition. Inasmuch as the Plaintiffs may claim for injunction against the Defendant’s act on these grounds, the lower court’s error by misapprehending the legal principles on the freedom of broadcast does not affect the conclusion of the judgment.

2. Regarding ground of appeal No. 6

An indirect compulsion is the only way to compel the performance of a liability of nonfeasance, which is a non-substitutable liability. In principle, a provisional order of indirect compulsory performance compels the obligor to make a certain compensation should it default on its obligations, upon the obligee’s separate petition and a necessary examination of the obligor, once the enforcement title is established in the adjudication process. Therefore, in an adjudication process to establish the enforcement title, a provisional order of indirect compulsory performance as a precaution against the obligor’s failure to perform may only be issued where it is probable that the obligor may infringe on the entitlement title ordering the performance of the liability of nonfeasance, notwithstanding the establishment of the enforcement title, at the time of closing argument of the pertinent proceedings, and where an optimal compensation amount can be assessed in the proceedings to be ordered under Article 261 of the Civil Execution Act (see, e.g., Supreme Court Decision 93Da40614, 40621, Apr. 12, 1996).

The court below determined that it is justifiable to order the Defendant to pay the Plaintiffs a compensation amount calculated to be KRW 5,000,000 per day from the date the Defendant violates the injunction, on the grounds of the Defendant’s continued advertisement up to the date of closing argument in the lower court, other circumstances revealed along the oral argument, as well as for the following reasons: notwithstanding the establishment of the enforcement title to prohibit the Defendant from performing the said advertisement, it is probable that the Defendant may violate the order, and it is possible to assess a reasonable compensation amount to be ordered against the Defendant under Article 261 of the Civil Execution Act.

In view of various circumstances such as the profit the Defendant gained by engaging in the said advertisement, the extent of the Plaintiffs’ losses, and the necessity of indirect compulsory performance, the determination by the court below is justifiable. In so doing, it did not err by misapprehending the legal principles on assessing compensation in an indirect compulsory action, etc., thereby affecting the conclusion of the judgment.

3. Conclusion

Therefore, all appeals are dismissed, and the costs of the appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices  

Ko Young-han (Presiding Justice)

Yang Chang-soo

Kim Chang-suk

Jo Hee-de (Justice in charge)

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